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Concord Biotech, backed by renowned investor Rakesh Jhunjhunwala, is witnessing substantial attention from investors for its highly anticipated initial public offering (IPO), which began on 4th August and is scheduled to close at 5:00 pm today. By 11:36 am, data from the National Stock Exchange indicated that the IPO had already been oversubscribed by 5 times, highlighting the immense interest in the company’s shares.
Notably, non-institutional investors exhibited remarkable enthusiasm, subscribing to their reserved portion at an impressive rate of 7.17 times. Retail investors also displayed considerable interest, subscribing 2.67 times, while employees booked their shares an impressive 18.58 times. The shares reserved for Qualified Institutional Buyers (QIBs), encompassing major investors like foreign institutional investors, mutual funds, and banks, were subscribed 2.92 times, pointing to substantial institutional demand.
Concord Biotech is offering its shares in a price band of Rs 705-741 per share, with the objective of raising Rs 1,551 crore solely through an offer for sale by its selling shareholder, Helix Investment Holdings Pte Limited. Helix currently holds a 20 percent stake in the company, while late Rakesh Jhunjhunwala, through his asset management firm RARE Enterprises, possesses a 24.09 percent shareholding. The primary goals of the IPO are to list the equity shares on the stock exchanges and conduct the offer for sale of up to 20,925,652 equity shares by the selling shareholders.
Investors should take note that 50 percent of the IPO shares are reserved for Qualified Institutional Buyers (QIBs), 15 percent for non-institutional investors, and 35 percent for retail investors.
For potential investors, understanding Concord Biotech’s background and growth prospects is crucial. In 2016, the company expanded its formulation business in India, which now constitutes approximately 11 percent of its sales. Moreover, Concord Biotech has successfully ventured into emerging markets such as Nepal, Mexico, Indonesia, Thailand, Ecuador, Kenya, Singapore, and Paraguay, while further expanding its presence in the United States.
Within India, Concord Biotech has developed a portfolio of 27 brands across various medical sectors, including immunosuppressants, nephrology, and anti-infective drugs for critical care. Over the FY21-23 period, the company achieved an impressive compounded annual growth rate (CAGR) of 18 percent in revenue, coupled with a robust EBITDA margin of 40 percent, demonstrating efficient cost management and profitability.
The company’s return ratios are commendable, with a return on equity (RoE) and return on capital employed (RoCE) standing at 20 percent and 19 percent, respectively, underscoring its financial strength and effective capital utilization.
In conclusion, Concord Biotech’s IPO has garnered significant interest from investors due to its successful track record, promising growth prospects, and solid financial performance. However, making informed investment decisions requires thorough research, analysis of personal financial goals, and seeking professional advice, if necessary.
